Kohlberg and the Cognitive Development Approach
Individuals develop their thoughts about ethical dilemmas based on a sequential and
hierarchical series of cognitive stages through childhood into adulthood. Higher stages rely on
thinking that is unavailable to those in lower stages.
There are three levels with several stages in each. Level 1 is preconventional, which consists
of Stage 1: obedience to rules and avoidance of punishment and Stage 2: satisfying one’s own
needs. Stage 1 would occur when Kevin is determining the possible solutions to the issue his
bosses have presented. Stage 2 would be Kevin contemplating the morality of the decision
before him, which was whether or not he was to commit fraud, and whether the decision
would benefit him. His bosses would be happy, but at what cost? Level 2 is conventional,
which consists of Stage 3: fairness to others and Stage 4: law and order. In Stage 3, Kevin
would need to consider whether the decision is in the best interest of others, which would be
the client. However, Stage 4 would counter this because it emphasizes the morality of law and
duty to social order, so Kevin would be discouraged from making this decision because it
goes against the law. The last level, postconventional, consists of Stage 5: social contract and
Stage 6: universal ethical principles. In Stage 5, Kevin would make the decision based on the
foundation of legal contracts, rights and values within society. He would consider the harm to
society, which may be the firm if it is discovered what Kevin has done. Stage 6 rarely occurs
according to Kohlberg, but is based on beliefs of right and wrong determined by universal
ethical principles that all should follow. This would essentially make Kevin’s decision for
him, as it is understood that the law should prevail.
Rest’s Four-Component Model of Ethical Decision Making
Rest’s model consists of four psychological processes: moral sensitivity (recognition), moral
judgment (reasoning), moral focus (motivation) and moral character (action). The model
shows that ethical decision making is made of several complex psychological processes and
cognitive structures. Each piece of the model must be present to continue. Kevin must first
interpret the situation as moral based on the effect on others his decision would make. He
must also determine what must “ideally” be done to solve his dilemma, also known as
prescriptive reasoning. This would provide his ideal solution. Once Kevin makes his decision,
he would focus on following through with said solution. Emotions may also play a role in this
stage. The last component emphasizes an individual’s potential inability to behave in
accordance with their ethical intentions. If he decides to charge the time he works on the
client, he must avoid distraction and criticism from his superiors.
Ethical Decision-Making Model
This model consists of five questions to ask when faced with a moral issue:
How will this action harm or benefit, and what alternatives do I have?
What moral rights do the affected parties have, and how can I best respect them?
Which course of action treats everyone the same?
Which course of action advances the common good?
Which course of action develops moral virtues?
These questions all require deep thought to make an ethical decision. They are not intended to
provide an immediate solution, but to provide thought-provoking analysis to determine the
most pressing ethical considerations. Kevin would need to use these questions to guide his
decision-making process to determine what course of action is based on equality and
goodness to others (Mintz & Morris, 2020).
I believe the ethical decision-making model and 5 questions would be the most useful in
making this decision. Kohlberg and Rest’s models are intended to essentially make the
decision for you, and it seems far blacker and whiter of a process. The five questions are
designed to gently guide the user to their decision and allow for deep thought to come to the
most ethical decision for the scenario.
Kohlberg’s Theory:
I am going to assume since Kevin has only been with Stooges, LLP for 3 months, he is fresh
out of college with his accounting degree with a desire to earn his CPA and build his career.
Therefore, since Kevin is a young adult, I do not think Kohlberg’s Stages of Moral
Development is the best model to use to analyze Kevin’s case of “eating time” and the
important decisions he must undertake. Kohlberg’s approach states that a person’s moral
development develops in stages as one matures: d Level 1-Preconventional (self-centeredness);
Level 2-Conventional (societal awareness and personal responsibility) and Level 3-
Postconventional (strong principles and cooperation). Kevin is currently at the Level 1-
Preconventional stage of life which is focused on the individual being very self—oriented and
ego-centric. d Since he is only at the beginning of his career, Kevin will most likely want to do
anything he can to earn the admiration of his employer (Bo and Moe) and value acceptance by
his colleagues at the firm. d So, more than likely he will opt to take the confidential client files
home with him to complete his audit work (and thus “eat time”). Since eating time is
unethical this decision would be unwise choice for Kevin. d If Kevin was in his 40s or 50s and
faced a different set of dilemmas that someone in this age group may encounter, I would say
Kohlberg’s Theory would be better suited to analyze his case. The development of morality
within Kohlberg’s work takes time and is complex and sophisticated. Kevin simply has not
reached these stages of moral development since he is still in his early twenties.
Rest’s Model: d d
Like Kohlberg’s Theory, James Rest’s Four-Component Model of Ethical Decision Making is
based on a lengthy process of moral and ethical development. Rest built his model on moral
psychological processes that an individual develops over time and include: 1 - moral
sensitivity; 2 - moral judgment; 3 - moral focus; and 4 – moral character. The theory is built
on a complicated series of decision making in which all four components interact with each
other. Adequacy in one area does not mean sufficient moral development in another area.
Therefore, moral failure can occur if a person is deficient in one component of the process.
Again, since Kevin is deemed “morally immature” with respect to Rest’s theory due to his
age and lack of life experience, analyzing his “Eating Time” case with James Rest’s model is
not a good choice.
Ethical Decision-Making Model: d d
I view this model as the best one for analyzing the Eating Time Case. It is a straightforward
and systematic approach to making ethical decisions and this is what Kevin could use in this
case. d It appears that his model could be used by accountants in general, as it is a linear-based
model used to hopefully make good, ethical choices. d The processes of: identifying the ethical
and professional issues (Should I take work home at night? d Do I report a colleague for ghost-
ticking?), identifying and evaluating alternative courses of action (Could there be a legal issue
with taking home confidential client information? What do the AICPA professional
standards or code of conduct dictate I do?), reflecting on the morality and virtues surrounding
the situation at hand (what could be the consequences to the accounting firm if the client’s
confidential documents taken home were stolen and competitors used information against
them?) and acting (congruent with Kevin’s professional obligations) can be constructed in a
way to provide the most ethically advantageous outcome for all parties involved. d d
The Heinz and the Drug case from the Kohlber example, in high school. I did not choose this
case because I feel like the concepts of preconventional, conventional, postconventional and
egoism falls within the Rest’s four components.
Rest’s four component model of ethical decision making consists of Moral Sensitivity, Moral
Judgment, Moral Focus, and Moral Character. I was interested to see what this model would
cover. “This teaching model describes a process of ethical decision making and
characteristics of morally charged situations that may influence the decision-making
process.” (Lincoln, Holmes, 2008)
All the concepts put together make up the decision-making process. Processing and figuring
out how one’s actions affect others. Figuring out what is ideal and should be done, which is
found through reasoning. Being able to judge and decide what is ideal solutions to the issue at
hand. After finding the right path, you then need to decide what actions are ethical to follow
through. Intentions are “Individuals with strong ethical character will be more likely to carry
out their ethical intentions with ethical action than individuals with a weak ethical character
because they are better able to withstand any pressures.” (Mintz & Morris, 2020)
Putting myself in Kevin’s place, I feel like I would be scared out of job security. Which is the
reason I believe that he offered to work more without pay. Bo and Moe knew what this would
cost Kevin, yet they only cared what it was costing them. Kevin is expected to perform his
duties according to GAAP laws/regulations. He should not be engaging in misconduct as it
would be unethical to follow such practices. If he goes along with Joyce’s methods, he would
be placing his own interest above the company/publics. Management should not allow Kevin
to work over the amount of time he is designated (paid) as it would be unethical to have him
work for no return. It would be taking advantage of their employees, and they should figure
out a better way to manage the situation. Kevin already knows Joyce’s methods are not
acceptable. He is questioning where he works just by learning of Joyce’s actions and Bo and
Moes reaction to him working overtime for no pay. He can consider if the ends justify the
means but he would also have to understand that regardless it would be wrong. He has an
obligation to be honest in his audit. “Understanding the model of ethical decision making and
the factors that may influence the process will help research administrators evaluate how
effectively they deal with ethical decisions and what may prevent them from making an
appropriate and responsible ethical decision” (Lincoln, Holmes, 2008)
Kohlberg’s theory of moral development emphasizes how morality and moral reasoning is
developed in children. Every person has to pass through distinctive stages to transform into
morally responsible individuals. At the first level focus is on obedience and punishment and
individual interests. In the second level, emphasis is given to interpersonal and authority
aspects. In the third level, a person develops an independent moral conception, and a
universal set of moral principles are in place that must be followed (Yilmaz et al., 2020). In
the case involving Kevin, his thinking process can play an instrumental role o that he can
distinguish between right and wrong. If he opts for ghost-ticking practice, it will imply that he
is focusing on self-interest instead of focusing on his responsibility as the auditor of Stooges
LLP. Similarly, such a moral development process of Bo and Moe can impact how they
support Kevin to work in a healthy environment.
The Four-Component Model that was developed by Rest states that the ethical action that a
person takes is the outcome of a number of psychological processes, including moral
sensitivity, moral reasoning, moral motivation and moral character (Forbes et al., 2018). In
the specific case, when a decision has to be taken, it is vital to understand the existence of an
ethical issue. Bo and Moe must acknowledge the challenges that Kevin is facing due to his
depression so that they can provide proper assistance to him. After they have decided to help
Kevin, they need to be motivated to implement the decision. For the execution of the plan,
moral character on their part is vital. Similarly, when Kevin is informed about the ghost-
ticking practice, he must demonstrate his moral character and avoid following the practice.
The ethical decision-making model focuses on evaluating a dilemma, thinking in advance,
helping, use of information, calculating risk and selecting an action plan (Hauck & Ling,
2021,p .1). By adopting such a model, Bo and Moe could have identified that Kevin is
struggling and he requires assistance for performing his auditing functions.
In the case, Kohlberg’s theory of moral development is ideal for analyzing the ethical aspects.
This model would ensure that every individual passes through a series of stages to identify an
action that is morally responsible and appropriate. The specific model was chosen over the
other two since it focuses on social development, emotional development and moral
development that influence the ethical behavior of a person (Zhang & Zhao, 2017). By
focusing on these elements it was possible to get a comprehensive insight into the morality of
involved individuals in the case.
If we look at Kevin’s situation using Kohlberg’s theory of moral reasoning, in stage 1 he
likely was concerned about the consequences if he told the partners about Joyce’s ‘ghost
ticking’. His sense of right or wrong may be directly linked to whether the outcome would be
positive or negative. Would he be commended for exposing the fraud or would his
relationships with his colleagues be forever tarnished?
Stage 2 is self-interest. Maybe he will be recognized for being honest and be on the fast track
to a promotion. d
In stage 3, Kevin may choose to not say anything about the ‘ghost ticking’ because he wants
to be a ‘team player’ even if the team is taking short cuts.
At stage 4, Kevin may believe that even though he is new and not as seasoned as Joyce and
the other accountants, that it is still his duty to bring to light the fact that audits are not always
complete and there may be other discrepancies that are taking place.
In this scenario, I have trouble applying stage 5, social contract. In some situations, ‘what
goes around comes around’ but here, it is never acceptable to sign off that something has been
done according to an agreement if it hasn’t.
Finally stage 6 is universal ethical principles. Accounting and audit regulations were created
to ensure financial reporting is correct and free from fraud and material misstatements.
Investors, banks and stakeholders rely on the opinion of the audit to make decisions.
Rest’s theory has been referred to as a neo-Kohlbergian approach to morality. Rest and his
colleagues didn’t think Kohlberg’s theory was complete and lack sufficient hypothetical
dilemmas and was too structured. Rest’s first schema is self-interest and goes from birth to
approximately 12 years of age.
The second schema is maintaining norms or the idea that if I abide by the rules, others will
too. In Kevin’s situation, he may decide to divulge what Joyce shared with him thinking that
if he does the right thing, Joyce and the other will too.
The third schema of Rest’s theory is post-conventional. This usually applies to young adults,
like Kevin, and contains shared ideals and reciprocity determine. This is similar to Kohlberg’s
fifth and sixth stages and is the most complicated in moral development. d
Rest’s theory, in my opinion, is too broad and does not consider factors such as
socioeconomic, ethnicity, culture and other factors that contribute to a person’s outlook on
mortality. d
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